|
on Evolutionary Economics |
| By: | Abhinash Borah (Department of Economics, Ashoka University); Christopher Kops (Heidelberg University) |
| Abstract: | We address the oft-repeated criticism that the demands which the rational choice approach makes on the knowledge and cognition of a decision maker (DM) are way beyond the capabilities of typical human intelligence. Our key ï¬ nding is that it may be possible to arrive at this ideal of rationality by means of cognitively less demanding, heuristic-based ecological reasoning that draws on information about others’ choices in the DM’s environment. Formally, we propose a choice procedure under which, in any choice problem, the DM, ï¬ rst, uses this information to shortlist a set of alternatives. The DM does this shortlisting by a mental process of categorization whereby she draws similarities with certain societal members—the ingroup—and distinctions from others—the outgroup—and considers those alternatives that are similar (dissimilar) to ingroup (outgroup) members’ choices. Then, she chooses from this shortlisted set by applying her preferences, which may be incomplete owing to limitations of knowledge. We show that if a certain homophily condition connecting the DM’s preferences with her ingroup-outgroup categorization holds, then the procedure never leads the DM to making bad choices. If, in addition, a certain shortlisting consistency condition holds vis-a-vis non-comparable alternatives under the DM’s preferences, then the procedure results in rational choices. |
| Keywords: | Rational choice, ecological rationality, ingroup-outgroup categorization, fast and frugal heuristics, homophily |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:07&r=all |
| By: | Benjamin Enke; Ricardo Rodríguez-Padilla; Florian Zimmermann |
| Abstract: | This paper introduces a new set of simple experimentally-validated survey games to measure moral universalism: the extent to which people exhibit the same level of altruism and trust towards strangers as towards in-group members. In a representative sample of the U.S. population, an individual’s degree of universalism is largely a domain-general trait. Older people, men, whites, the rich, the rural, and the religious exhibit less universalist preferences and beliefs. Looking at economic behaviors and outcomes, universalists donate less money locally but more globally, are less likely to exhibit home bias in equity and educational investments, have fewer friends, and report being more lonely. |
| Keywords: | moral universalism, in-group bias |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7921&r=all |
| By: | Abhinash Borah (Department of Economics, Ashoka University); Christopher Kops (Heidelberg University) |
| Abstract: | We introduce a theory of socially influenced individual choices. The source of social influence on an individual are his reference groups in society, formed of societal members he psychologically or contextually relates to. Choices made within an individual’s reference groups have an influence on the choices he makes. Speciï¬ cally, we propose a choice procedure under which, in any choice problem, he considers only those alternatives that he can identify with at least one of his reference groups. From this “consideration set,†he chooses the best alternative according to his preferences. The procedure is an interactive one and captures the steady state of a process of mutual social influence. We behaviorally characterize this choice procedure. We also highlight the empirical content of the procedure by relating it to both experimental evidence and real world applications. |
| Keywords: | Individual choice, social influence, reference groups, consideration sets, interactive behavioral choices |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:06&r=all |